LNG Bunkering Market to Develop at 63.6% CAGR
For shipping companies operating in emission control areas (ECAs), liquefied natural gas (LNG) represents an attractive bunkering alternative.
"The lower cost of LNG bunker fuel than other variants of ECA-compliant fuels in Europe and North America is the primary reason boosting the LNG bunker fuel market in the global scenario", says a lead TMR analyst.
Usage of LNG as a ship fuel reduces sulfur oxide (SOx) emissions by 90% to 95% compared to conventional petroleum fuels. Due to strict sulfur emission mandates in place executed via Annexure VI of the International Maritime Organization (IMO), an increasing number of shipping companies and vessel operators are switching to LNG as a bunker fuel.
Despite rising opportunities for environment-friendly fuels, LNG bunkering infrastructure has developed only in a couple of ports around the North Sea, the English Channel, and the Baltic Sea, since shipping companies operating in these regions have to adhere to stringent sulfur regulations.
Market veterans anticipate the sulfur emission norms to tighten further, resulting in a widening gap between natural gas and conventional fuel prices. Impelled by such factors, the development of LNG bunkering infrastructure has paced up in the aforementioned European regions.
The majority of LNG bunkering stations are currently located in Northern Europe. These stations are designed specifically to cater to the fuel demands of inland vessels as well as large ships docking at ports in ECAs.
Enhanced initiatives adopted by port authorities and financial assistance from the European Union are expected to propel the development of LNK bunkering stations across the most prominent trading centers in Europe.
Continuously dropping prices of natural gas in North America will boost the sales of LNG bunker fuel in North American ports, according to the report. Likewise, Asia Pacific countries such as South Korea and China have substantially invested in the development of LNG bunker fuel.
Moreover, no stringent regulations are likely to be imposed on the use of bunker fuel in this region before 2020. Hence, the demand for bunker fuel in Asia Pacific is projected in the report to grow from 2020 onwards.
Due to these reasons, by capacity, the global LNG bunkering market will exhibit a robust 63.6% CAGR from 2014 to 2025.
